Tag: finance

Greetings from Peru!

 

When most investors think about South America, they think about Brazil: the single largest South American economy.

 

Indeed, even the famous acronym for the most important emerging markets “BRIC” features Brazil (the “B”) as the South American representative.

 

But Peru is a real gem you should know about.

 

Peru’s economy has grown at an average pace of 7% for the last 10 years. During that time the Peruvian middle class has literally DOUBLED in size.

 

I can attest to seeing this in action. When I first came here in 2009, the famous Jockey Plaza mall featured mainly Peruvian brands and stores with middle priced goods.

 

Today, the mall has completely been designed with luxury goods (I saw Versace, Hugo Boss and the like) and beautiful architecture:

Source: Consultora Metropolis

 

Everywhere you turn Peruvians are hustling, building new condominiums, selling hand crafted goods, and of course, eating the famed Peruvian cuisine (I’ve already packed on 5lbs in the last two weeks alone!).

 

And the work ethic is tremendous.

 

Peruvians don’t believe in sitting around waiting for handouts. There’s a saying in Peru “you don’t work… you don’t eat.” And they live by it.

 

A friend of mine recently ordered a modern glass dining room table for his 7^th floor apartment. The store thought the table would fit in the elevator and so sent only two deliverymen for the 100+lb tabletop to be delivered.

 

The table didn’t fit in the elevator.

 

Rather than rescheduling the delivery, the two guys (both of them shorter than 5’5”) hauled the table up the seven flights of stairs. The entire time they had to do so somewhat bent over to fit the table in the stairwell.

 

The dispatched was irate. Why did they deliver the table instead of requesting more help? Their answer? “We took care of it.”

 

THAT’S SOME SERIOUS WORK ETHIC.

 

For actionable market insights on how to play bull runs and bear corrections, swing by:

 

http://phoenixcapitalmarketing.com/special-reports.html

 

Best Regards

 

Phoenix Capital Research

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/eV7xUXt4gxE/story01.htm Phoenix Capital Research

Treasuries rallied from the pre-open release of inflation data this morning and never looked back (with 30Y unch on the week and 5Y -4bps). Stocks tumbled notably through the US open but recovered as Europe closed hovering quietly around VWAP all afternoon. The rally back in stocks coincided with a drop in VIX which smacked of hedges being lifted and exposure being reduced into the momentum-ignoted strength. Gold and silver saw weakness (though the latter is still +1% on the week). The USD weakened notably as Europe closed with some significant CHF buying. Stocks closed ugly…as VIX was significantly bid (up for the 5th day in a row).

 

VIX closed higher for the 5th day in a row – for the first time in 2013…

 

Stocks dipped from the US open, ripped from the EU close, then dumped at the US close…

 

JPY carry was not supportive at all… and correlations have broken

 

Anxiety is high and bonds were bid (especially after CPI)

 

as was CHF…

 

Gold ansd Silver jumped around the US equity open but quickly fell back (and notably appeared to drop into the low inflation print)…

 

Charts: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1–R5eTZmas/story01.htm Tyler Durden

Treasuries rallied from the pre-open release of inflation data this morning and never looked back (with 30Y unch on the week and 5Y -4bps). Stocks tumbled notably through the US open but recovered as Europe closed hovering quietly around VWAP all afternoon. The rally back in stocks coincided with a drop in VIX which smacked of hedges being lifted and exposure being reduced into the momentum-ignoted strength. Gold and silver saw weakness (though the latter is still +1% on the week). The USD weakened notably as Europe closed with some significant CHF buying. Stocks closed ugly…as VIX was significantly bid (up for the 5th day in a row).

 

VIX closed higher for the 5th day in a row – for the first time in 2013…

 

Stocks dipped from the US open, ripped from the EU close, then dumped at the US close…

 

JPY carry was not supportive at all… and correlations have broken

 

Anxiety is high and bonds were bid (especially after CPI)

 

as was CHF…

 

Gold ansd Silver jumped around the US equity open but quickly fell back (and notably appeared to drop into the low inflation print)…

 

Charts: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1–R5eTZmas/story01.htm Tyler Durden

"The Fed will never end QE for good…" blasts Marc Faber, "they may do some cosmetic adjustments, but within a few years, [Fed] asset purchases will be substantially higher than they are today." There will be another weakening in the US economy, Faber warns, and "the Fed will argue it hasn't done enough and will do more… they have been irresponsible for 20 years."

Noting that investors should "not buy stocks but be in cash", the stunned CNBC anchor exclaims "How could you sit in cash when th emarket is on fire and interest rates are so low?" to which Faber blasts, "The market is not on fire, look at IBM, Cisco, and Intel – all lower than 2011; it's on fire if you are in Facebook or Twitter and not everyone owns them."

Use rallies to reduce exposure, he warns, "we will go up until it is over; and when it is over the drop will be larger than 20%"

 

 

On The Fed

"They will never end QE for good... they may do some cosmetic adjustments, but within a few years, [Fed] asset purchases will be substantially higher than they are today"

 

"Do not forget, the stock market and the so-called economic recovery will be in its 5th year… and at some point the economy will weaken again. The Fed will argue it hasn't done enough and will do more"

On Money Printing

If money printing can truly enrich the world, we should all be on the beach! Money printing does not create wealth but that's what the Fed thinks.

On the Fed's ability to spot bubbles,

Faber analogizes the members sat on top of a barrel of dynamite covered in gasoline and lighting a cigar…"and still not notice any danger."

 

"The members of the Fed have never worked a single day of their lives in business" and are blind to the real world impact of the policies.

 

"They have been irresponsible for at least 20 years," by creating one bubble after another and "bailing out institutions that should have failed."

On Stocks,

The S&P will not go up forever, and the happy times will not last forever; use any rally in the US markets from here to lighten up on long positions…

 

We have had a huge run off the lows in the US stock market, "we will go up until it is over; and when it is over the drop will be larger than 20%"

 

I don't think people should buy stocks – they should be in cash.

On Going To Cash,

The most-hated asset at the present time is cash

 

The stunned anchor exclaims "How could you sit in cash when th emarket is on fire and interest rates are so low?" to which Faber blasts,

 

"The market is not on fire, look at IBM, Cisco, and Intel – all lower than 2011; it's on fire if you are in Facebook or Twitter and not everyone owns them."

On the US economy,

In the US, the numbers may look better – but look at who publishes the numbers… globally the numbers have actually deteriorated.

On the Global Economy,

The global economy will not be strengthening next year, it will be weakening as all the Asian economies are slowing

On Gold and Gold Stocks,

Of all the asset claases that I look at, the most depressed is precious metals (and precious metals equities).

 

If money printing continues, which he sees as likely around the world as they "continue their insane policies", these will benefit the most.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4xwXEuM-nRo/story01.htm Tyler Durden

"The Fed will never end QE for good…" blasts Marc Faber, "they may do some cosmetic adjustments, but within a few years, [Fed] asset purchases will be substantially higher than they are today." There will be another weakening in the US economy, Faber warns, and "the Fed will argue it hasn't done enough and will do more… they have been irresponsible for 20 years."

Noting that investors should "not buy stocks but be in cash", the stunned CNBC anchor exclaims "How could you sit in cash when th emarket is on fire and interest rates are so low?" to which Faber blasts, "The market is not on fire, look at IBM, Cisco, and Intel – all lower than 2011; it's on fire if you are in Facebook or Twitter and not everyone owns them."

Use rallies to reduce exposure, he warns, "we will go up until it is over; and when it is over the drop will be larger than 20%"

 

 

On The Fed

"They will never end QE for good... they may do some cosmetic adjustments, but within a few years, [Fed] asset purchases will be substantially higher than they are today"

 

"Do not forget, the stock market and the so-called economic recovery will be in its 5th year… and at some point the economy will weaken again. The Fed will argue it hasn't done enough and will do more"

On Money Printing

If money printing can truly enrich the world, we should all be on the beach! Money printing does not create wealth but that's what the Fed thinks.

On the Fed's ability to spot bubbles,

Faber analogizes the members sat on top of a barrel of dynamite covered in gasoline and lighting a cigar…"and still not notice any danger."

 

"The members of the Fed have never worked a single day of their lives in business" and are blind to the real world impact of the policies.

 

"They have been irresponsible for at least 20 years," by creating one bubble after another and "bailing out institutions that should have failed."

On Stocks,

The S&P will not go up forever, and the happy times will not last forever; use any rally in the US markets from here to lighten up on long positions…

 

We have had a huge run off the lows in the US stock market, "we will go up until it is over; and when it is over the drop will be larger than 20%"

 

I don't think people should buy stocks – they should be in cash.

On Going To Cash,

The most-hated asset at the present time is cash

 

The stunned anchor exclaims "How could you sit in cash when th emarket is on fire and interest rates are so low?" to which Faber blasts,

 

"The market is not on fire, look at IBM, Cisco, and Intel – all lower than 2011; it's on fire if you are in Facebook or Twitter and not everyone owns them."

On the US economy,

In the US, the numbers may look better – but look at who publishes the numbers… globally the numbers have actually deteriorated.

On the Global Economy,

The global economy will not be strengthening next year, it will be weakening as all the Asian economies are slowing

On Gold and Gold Stocks,

Of all the asset claases that I look at, the most depressed is precious metals (and precious metals equities).

 

If money printing continues, which he sees as likely around the world as they "continue their insane policies", these will benefit the most.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4xwXEuM-nRo/story01.htm Tyler Durden

While this morning we were re-assured by the government’s statistics that there is no inflation (or deflation); implicitly enabling the Fed’s extreme monetary policy to continue with no immediate consequence, it would appear there is an oddly synchronized rise in the price of something critical to day-to-day ‘coping’ for many – alcohol prices. Spurious correlation or unintended consequence? Cost-push or demand-pull?

 

(h/t @Not_Jim_Cramer)

Seems like it might be time for prohibition once again?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/dGFp58Ph3cw/story01.htm Tyler Durden

.

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/w9zLnq8XwLM/story01.htm williambanzai7

There seem to be two camps at Deutsche Bank these days: one, lead by the observant and somewhat contrarian Jim Reid, who recently asked the all important question about 2014 (“what if there is a recession?”), who accurately observed that something “structurally changed” since the great financial crisis (pretty clear what), and who even dared to suggest that the Fed will never taper, especially with the economy so late in the cycle already. And then there is Joe LaVorgna, best known for having a losing track record to Groundhog Phil. It appears that this morning Joey emerged from his lair deep inside 60 Wall, sniffed the cold air, and saw the shadow of a $10 billion taper, which is what he predicts the Fed will do tomorrow.

LaVorgna’s full winter weather forecast:

The FOMC statement will be released at 2PM EST along with updated real GDP, unemployment, inflation and fed funds forecasts. The Chairman’s press conference will commence shortly thereafter. We are looking for a $10 billion Treasuries only taper—we have been projecting this since the much stronger-than-expected October employment data (reported on November 8), which was subsequently matched by a similarly strong November employment report. Current quarter growth prospects continue to brighten with second half output poised to average over 3%. Moreover, the budget sequester was loosened, as we also had anticipated, so there is little reason for the Fed to delay tapering, in our view. The fact that the 10-year Treasury yield is at nearly the same level as it was right before the September FOMC, while the timing of the initial rate hike was pushed out at least six months from early 2015 to late 2015, tells us that the financial markets are indeed expecting a taper. There is now much less concern on behalf of monetary policymakers that a taper will engender a further tightening in financial market conditions. Indeed, since the September non-taper, equity prices are higher and credit spreads are tighter.

 

Nonetheless, the Fed will look to blunt any negative reaction to a taper, which will help appease the doves on the FOMC by strengthening the Committee’s forward guidance; tapering is not the same thing as a tightening. The Fed wants to hammer home the message that even after asset purchases are completed, monetary policy will remain extraordinarily accommodative. Fed Nominee Yellen believes this will lower term premium and help anchor longerterm rates. How will the Fed strengthen forward guidance? Words are cheap (at least relative to other measures, such as tinkering with IOER), so we believe the best way to extend guidance is to change the threshold on the unemployment rate—especially since the rate is already at the level Chairman Bernanke had previously targeted for the completion of asset purchases. Note to Fed: If unemployment insurance benefits are not renewed next month, the unemployment rate could promptly fall another three-tenths. Conceivably, the unemployment rate could be 6.5% by the March meeting. Does the Fed really want to continue to have to explain why a 6.5% threshold is not a trigger for tightening and why investors should ignore it? It seems to us that the easiest and most efficient way to strengthen forward guidance is to lower the unemployment rate threshold to 6.0% (or possibly even 5.5%). What about the fact that just “a couple of participants” supported a change in the threshold? The minutes were compiled before William English—the Secretary of the FOMC and the most senior economist at the Board of Governors—presented a paper at the annual IMF meeting in November which said that the optimal unemployment rate for the Fed was 6% or lower.

 

We do not believe the Fed is going to cut the interest paid on excess reserves for two reasons: One, this will not stimulate lending; and, two, it could cripple the short end, potentially causing major negative consequences. For example, some large money center banks warned they would begin charging depositors. What about the forecasts? The Fed will likely slightly raise its long-term GDP forecasts, trim its near-term unemployment rate forecasts and essentially maintain its inflation forecasts. We doubt the fed funds forecasts will change appreciably, since the economic forecasts should be little changed.

We have reached out to Phil for his take and will update the post when we get a full comment from the groundhog’s spokesman.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Ntcn_hQ5iu4/story01.htm Tyler Durden

There seem to be two camps at Deutsche Bank these days: one, lead by the observant and somewhat contrarian Jim Reid, who recently asked the all important question about 2014 (“what if there is a recession?”), who accurately observed that something “structurally changed” since the great financial crisis (pretty clear what), and who even dared to suggest that the Fed will never taper, especially with the economy so late in the cycle already. And then there is Joe LaVorgna, best known for having a losing track record to Groundhog Phil. It appears that this morning Joey emerged from his lair deep inside 60 Wall, sniffed the cold air, and saw the shadow of a $10 billion taper, which is what he predicts the Fed will do tomorrow.

LaVorgna’s full winter weather forecast:

The FOMC statement will be released at 2PM EST along with updated real GDP, unemployment, inflation and fed funds forecasts. The Chairman’s press conference will commence shortly thereafter. We are looking for a $10 billion Treasuries only taper—we have been projecting this since the much stronger-than-expected October employment data (reported on November 8), which was subsequently matched by a similarly strong November employment report. Current quarter growth prospects continue to brighten with second half output poised to average over 3%. Moreover, the budget sequester was loosened, as we also had anticipated, so there is little reason for the Fed to delay tapering, in our view. The fact that the 10-year Treasury yield is at nearly the same level as it was right before the September FOMC, while the timing of the initial rate hike was pushed out at least six months from early 2015 to late 2015, tells us that the financial markets are indeed expecting a taper. There is now much less concern on behalf of monetary policymakers that a taper will engender a further tightening in financial market conditions. Indeed, since the September non-taper, equity prices are higher and credit spreads are tighter.

 

Nonetheless, the Fed will look to blunt any negative reaction to a taper, which will help appease the doves on the FOMC by strengthening the Committee’s forward guidance; tapering is not the same thing as a tightening. The Fed wants to hammer home the message that even after asset purchases are completed, monetary policy will remain extraordinarily accommodative. Fed Nominee Yellen believes this will lower term premium and help anchor longerterm rates. How will the Fed strengthen forward guidance? Words are cheap (at least relative to other measures, such as tinkering with IOER), so we believe the best way to extend guidance is to change the threshold on the unemployment rate—especially since the rate is already at the level Chairman Bernanke had previously targeted for the completion of asset purchases. Note to Fed: If unemployment insurance benefits are not renewed next month, the unemployment rate could promptly fall another three-tenths. Conceivably, the unemployment rate could be 6.5% by the March meeting. Does the Fed really want to continue to have to explain why a 6.5% threshold is not a trigger for tightening and why investors should ignore it? It seems to us that the easiest and most efficient way to strengthen forward guidance is to lower the unemployment rate threshold to 6.0% (or possibly even 5.5%). What about the fact that just “a couple of participants” supported a change in the threshold? The minutes were compiled before William English—the Secretary of the FOMC and the most senior economist at the Board of Governors—presented a paper at the annual IMF meeting in November which said that the optimal unemployment rate for the Fed was 6% or lower.

 

We do not believe the Fed is going to cut the interest paid on excess reserves for two reasons: One, this will not stimulate lending; and, two, it could cripple the short end, potentially causing major negative consequences. For example, some large money center banks warned they would begin charging depositors. What about the forecasts? The Fed will likely slightly raise its long-term GDP forecasts, trim its near-term unemployment rate forecasts and essentially maintain its inflation forecasts. We doubt the fed funds forecasts will change appreciably, since the economic forecasts should be little changed.

We have reached out to Phil for his take and will update the post when we get a full comment from the groundhog’s spokesman.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Ntcn_hQ5iu4/story01.htm Tyler Durden